The court issued an opinion in the case of Comcast v. the FCC, indicating that the ancillary authority vested in the FCC by the Communications Act of 1934 did not permit it to regulate Comcast's cable network. The case stems from 2007, when Comcast impeded the delivery of the BitTorrent service that allows users to exchange large files over the Internet. The FCC intervened and told Comcast to stop its practice, based on a set of "Internet neutrality" principles that the FCC adopted in 2005.

Comcast argued that it had spent billions of dollars on its network and it should not have to allow services to deplete its bandwidth capacity. The ISP also argued that the ban was not legal because the net neutrality principles adopted by the FCC were not actual laws passed by Congress.

Public interest groups rallied with the FCC in advocating net neutrality. Large broadband providers can become the gatekeepers over which online services are available to the public, they argued. Rules must be in place to prevent large ISPs from prioritizing Internet traffic and even degrading the services of competing interests. Google and Skype joined the net neutrality cause.

Tuesday's court ruling not only means that the FCC can't regulate broadband providers, but it also can't carry out its National Broadband Plan to improve Internet services across the United States, according to Free Press, a national, nonpartisan, media reform watchdog group.

"The decision has forced the FCC into an existential crisis, leaving the agency unable to protect consumers in the broadband marketplace and unable to implement the National Broadband Plan," said S. DerekTurner, research director for Free Press, in a prepared statement.

"This cannot be an acceptable outcome for the American public and requires immediate FCC action to re-establish legal authority," Turner added.

The FCC can appeal Tuesday's decision, or it could ask Congress to grant it the authority to regulate broadband as an information service. The 1996 Telecom Act decoupled Internet traffic from being regulated like the public switched telephone network. Instead, Internet traffic was deemed to be an information service.

The court's ruling could backfire on companies like Comcast. Ben Scott, policy director at Free Press, told the Associated Press that broadband Internet traffic could end up being reclassified as a telecommunications service, subject to government regulations.

About the Author

Herb Torrens is an award-winning freelance writer based in Southern California. He managed the MCSP program for a leading computer telephony integrator for more than five years and has worked with numerous solution providers including HP/Compaq, Nortel, and Microsoft in all forms of media. You can contact Herb here.